Rethink partnership as LLC membership
Without a separate business entity, like an LLC or corporation, business owners are held personally responsible for debts and for legal actions against the business. The risks of business partnerships are similar, except that each partner may be held liable for the actions of each other partner. This means that one partner can enter into debts and other financial liabilities that other partners become responsible for.
A Partnership Agreement can alleviate some of these risks, but it only goes so far, and only is enforceable between partners. It may define each partner’s role, help limit disputes, and formulate how partners share debt liability. But, even with an agreement, general business partners are still personally liable for business debts and in potential lawsuits.
Registering a business partnership as an LLC can limit a business owner’s liability to just the assets owned by the LLC. If your business faces lawsuits, debts, or even bankruptcy, you and your partners may only be on the hook for what the LLC owns.
It takes a village
Behind virtually every business success story, there is a support team. As the saying goes, it takes a village to raise a child—and the same can be said about business ventures.
The most successful entrepreneurs understand that they have certain limitations and they make a Business Plan that accounts for those. Your Business Plan may address critical functions such as raising capital and managing finances, administration, marketing, and legal considerations. Maybe you are an expert at landscape design that can plan majestic all-season gardens while blindfolded, but putting together a Profit and Loss Statement or Employee Handbook is a real challenge.
Whether you are partnering with a best friend or simply leaning on trusted service providers to make your dream business a reality, Rocket Lawyer is here to help. A Rocket Legal+ membership provides entrepreneurs with access to Pro Services from registering an LLC to tax filing to contract reviews and more.
Let Rocket Lawyer help you start up today!
- Register your LLC.
When you register an LLC with one or more co-owners, each owner gains valuable personal liability and asset protection. And with a Rocket Legal+ membership, your first LLC registration filing is FREE (excluding state fees).
- Get a registered agent.
When registering an LLC (or corporation), states typically require business to name a registered agent. This is someone who can be available during normal business hours to receive official and legal mail. Rocket Legal+ members save HALF OFF registered agent services.
- Talk to a Legal Pro.
Get advice on how to set up your LLC and structure your partnership to protect your personal assets. Whenever you have a question or need a contract reviewed, reaching out to a Rocket Legal Pro™ is an easy and reliable way to get affordable legal advice.
- Everything legal all in one place.
From your service contracts to your Employee Handbook, Rocket Lawyer helps business owners to manage their businesses with easy-to-use and easy-to-access legal support. And when you have questions, or need help with taxes, annual reports, contract reviews, or trademark registration, Rocket Lawyer has you covered with everything legal, all in one place.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
